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All Forum Posts by: Basit Siddiqi

Basit Siddiqi has started 56 posts and replied 8078 times.

Post: Tax Planning for a REI with W2 income

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

If you have or looking to invest in a STR, have a conversation with your accountant to see ways that you can classify the property as active instead of passive.

This will allow you to have the real estate losses offset the other forms of income such as wages, interest, dividends, etc.

This can drastically reduce your taxes in a given year

Post: How to offset depreciation recapture from a failed 1031 exchange

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

You will want to see if you can acquiure a property and utilize the passive losses from the property to offset the gain from the property sold.


Best of luck!

Post: Short Term Rental, HELOC & Cost Segregation Question

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

Yes, if you acquire a property / furnishings with a HELOC, the HELOC interest will be potentially deductible.

Best of luck!

Post: Looking for a Solid Real Estate Tax Strategist — Any Recommendations?

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

If you are considering STR's, you should have a conversaton with your accountant to explain to you what is required to have a STR to be classified as active instead of passive. This will allow you to offset the real estate losses against other forms of income such as wages, interest, dividends, etc.

Best of luck!

Post: Cost for Preparation of Tax Return

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

$1,800 seems like a great price considering you have 8 propertes. 

It is possible that one months rent across the 8 properties paid for the accounting bill.

Can you clarify the P&L that has the 7 properties.
Does this profit and loss utilize the classes function where there is a separate column for the 7 properties?
If there is no separation between the 7 properties, then it seems like the bookkeeping is not being done properly

Best of luck!

Post: Cost Segregation Study Firm Recommendations

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

Have you decided which type of cost segregation firm you will be utilizing?

There are two types of cost segregation firms
1) One where there is an engineer who stops by the property to generate a report based on their findings
2) One where you are presented a questionnaire that you will answer based on your knowledge and understanding of the property. Once the questionnaire is completed, a report will be provided.

Post: Is REI worth it (salaried employee who is thinking about REP status for taxes)

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

Acquiring a small business is a job and there is some work involved. 

What type of small business are you looking to acquire? Do you or your husband have the expertise and time to devote to this business?

I like the path of acquiring real estate and having your spouse claim REPS status.
But this only applies if you acquire real estate as good investments and the tax refunds through REPS is icing on the cake.

best of luck! 

Post: Any CPAs or tax accountants in the Wake County area?

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

You want to work with an accountant who will know how to properly minimize the taxes from the small business. Some conversations to have is if it is worth it to have an S-Corp.
Other conversations to have are should you set up a retirement account such as a SEP IRA or a solo 401k

Best of luck to you!

Post: Tax considerations during home buying

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

Are you talking about a personal residence or a rental property?

There are tax benefits for both but the benefits are different

The tax benefits of having a personal residence are potentially deducting property taxes and mortgage interest. There are also opportunities to exclude gain on the sale.

If you have a rental property, there are ways to have the rental income shielded by depreciation.

Best of luck!

Post: Bookkeeping Assistance Needed

Basit Siddiqi
Posted
  • Accountant
  • New York, NY
  • Posts 8,244
  • Votes 3,729

My recommendation is to save receipts into an online storage system such as dropbox, google drive or apple drive.

I then recommend having a separate bank account and credit card just for your rental related transactions.

Then use excel or an accounting software to properly track your income and expenses.